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Broadband study points to co-op, access at dam

| April 28, 2004 12:00 AM

By Brent Shrum, Western News Reporter

If Libby can come up with $5.5 million, the community can build a world-class telecommunications network that will pay for itself within eight years, according to a 1,000-page study released last week.

Representatives of Zero dB, the Spokane-based firm commissioned to carry out the study, briefed the Libby City Council on their findings during a special meeting Friday evening. The firm is proposing that the community build a fiber optic line to connect to the Bonneville Power Administration¹s system at Libby Dam and lease BPA fiber to Spokane and Kalispell.

Unlike several other options that were considered, the proposal meets all four criteria provided by the local committee working with Zero dB, said company founder and chief executive officer Dana Bisaro. The criteria are that the network provide direct connectivity to Kalispell to meet the needs of users such as St. John¹s Lutheran Hospital and Flathead Valley Community College, that it provide affordable bandwidth, that it have the ability to generate revenue to pay for itself, and that it provide redundancy for reliability.

Zero dB was one of three firms that responded to a request for qualifications to carry out the study. Bisaro had already been to Libby and reviewed a proposal to connect to CenturyTel fiber optics at Marion.

³We basically felt that you guys were going to spend $3 million to put yourself in a hostage situation,² he said.

Under Zero dB¹s proposal, the entire network would belong to a user-owned cooperative. Because the network would close a loop that is currently open in the Inland Northwest, income-generating opportunities would exist to make the system available to telecommunications companies looking for backup routes for use in emergencies. Because it would terminate at a ³carrier hotel² where numerous providers base their services, the cooperative would be free to negotiate for the best rates to connect to the outside world, Bisaro said.

³Basically a carrier hotel is like the Chicago Mercantile,² he said. ³It¹s a trading floor.²

The initial cost of building the network is estimated at around $3.5 million — $2 million of which would go toward a 20-year lease of BPA fiber — while another $2 million is expected to be needed before the system became cashflow positive in three to five years. After eight years, the network would be showing a net profit, said Jeff Kavadias, a certified public accountant working with Zero dB on the study.

³So yes, it is a very economically feasible project, but if you¹re looking for a two-year return on it it¹s not going to happen,² he said.

Zero dB¹s plan calls for construction of the network to start next spring if funding can be secured. Construction is expected to take about six months. The first phase of the project would include building the network¹s hub in Libby and connecting businesses in the downtown area. The second phase would see the extension of services to outlying residential areas.

Ultimately, the network would provide not only data services like internet access but also telephone and video services. The system would employ a projected 24 people including customer service, clerical, engineering, installation and sales staff.

The project would increase the amount of bandwidth available to the Libby area about 25 times and lower the cost of access. In addition to the basic voice, data and video services provided by the current telecommunications infrastructure, the system could provide the ³next-generation services² increasingly demanded by the business world, Bisaro said.

Following the plan developed by Zero dB would spur economic development, improve the quality of life, serve the needs of the business and residential sectors and generate revenue that would stay in the community, Bisaro said.

The existing infrastructure is running at about maximum capacity, said Jeanie Gentry, a St. John¹s Lutheran Hospital employee and member of the committee working with Zero dB.

³Our local provider likes that,² she said. ³It will create a lot of demand for a service that isn¹t available, and the price goes up.²

Lincoln County Campus director Pat Pezzelle, another committee member, said the campus is currently paying $1,400 per month for a T-1 line that doesn¹t have enough capacity to meet the institution¹s needs. The campus¹s two distance learning labs can¹t be used to their full capacity at the same time, Pezzelle said.

According to Zero dB¹s study, the average price for a T-1 line in other communities is $600 per month. If a community network is built in Libby, Pezzelle expects to be able to obtain better services at a lower price.

³What my question has always been is ŒCan I do anything that I can¹t do now?¹² he said. ³The answer is, ŒYeah, I can do a lot that I can¹t do now.¹²

The committee working with Zero dB has been discussing the project with U.S. senators Conrad Burns and Max Baucus. Both sit on the six-member committee overseeing the Rural Utilities Service, which could provide funding for the project, and both have expressed a willingness to help.

³There¹s different sources we¹re looking at,² said committee chairman Earl Messick. ³We haven¹t gotten anything nailed down yet.²

The process of forming a co-op has already started, Messick said.

³The only thing we have left to do is approve our bylaws and get the money and we¹re up and running,² he said.

Several members of the city council expressed support for moving ahead with the plan, although the council took no formal action.

³I don¹t see how you couldn¹t support it,² said Councilman Doug Roll.

Copies of Zero dB¹s report are available at the county library, and the report can be downloaded section-by-section in PDF format at www.zerodb.net/lcbn.